<nettime> M$ financial fraud [2/3]

["nettime's_roving_reporter" <nettime-l@bbs.thing.net>]

   9)  Trying to Discredit Those Seeking to Expose the Scheme:  Microsoft
   fired its internal auditor, regularly bullies reporters and has told
   numerous publications that I am an extremist. This might explain why
   reporters are afraid to print the facts, for instance that Microsoft
   took a $9 billion tax deduction for wages in 1999 and didn't charge a
   dime of this amount against earnings.

   10)  Money Laundering:  Microsoft has been aggressively investing cash
   pilfered from the retirement system in a variety of new businesses,
   many outside the U.S., including cable investments in Brazil and
   England. We read about the Russian government robbing its citizens of
   $10 billion in IMF loans.  What about the impact of the retirement
   system being pilfered and being set up for a Savings and Loan like
   debacle?

   11)  Corruption of Higher Education:  Microsoft is making massive cash
   infusions to leading Universities and impairing the system's
   independence.  In the last year alone Microsoft has given MIT more
   than $50 million in grants, focusing on key growth areas including
   storage services and software to provide course instruction over the
   Internet. In the past we were able to rely on these Universities to
   stimulate key debates yet now they are silent on this pyramid issue.
   Two Universities that should be ashamed of themselves for not only not
   disclosing this situation yet also fostering its development are
   Harvard and Stanford.  They are contributing greatly to the complete
   corruption of our financial markets.

   12)  Manipulating Investors Who Use a Passive Approach Relying on
   Indexes Such as the S&P 500.  In an effort to reduce investment fees
   and provide solid diversification, investment based upon mirroring the
   S&P 500 has become the most significant component of large public
   pension plans. Since Microsoft represents more than 4 percent of the
   S&P 500, Microsoft knows that four cents of every dollar going to
   stock purchases will go toward the purchase of Microsoft stock.
   Again, this situation has developed because Microsoft has inflated its
   earnings to such an extent that it looks much more profitable than it
   really is, fueling interest in the stock and resulting in a market
   value of close to half a trillion dollars.

   It is admirable to stick to an investment strategy using passive
   indexes based upon the S&P 500, yet this is not about investment
   strategy but rather fraud management.  For this reason a letter was
   sent to the top 100 teachers unions in the country, encouraging them
   to effect a policy change designed to combat this fraud and have
   Microsoft removed from their portfolios.  California State Controller
   Kathleen Connell, who sits on the board of the California Teachers
   Pension,  has also been sent a summary of findings in the hope that
   she will help address this issue. Another good question might be, why
   haven't the State Teachers fund advisors initiated this effort on
   their own, that is, to modify the index in order to protect
   participants and meet their fiduciary responsibility?

   Is it not also ironic that Judge Penfield Jackson is trying to
   determine whether or not Microsoft has monopoly power and meanwhile
   his pension is most likely being plundered by Microsoft in the most
   significant financial fraud this century?  Federal Pensions rely
   heavily on an S&P 500 index fund.

   In October the Dow Jones Corporation decided to add Microsoft to the
   Dow Index.  On a market cap basis, Microsoft will now account for more
   than 15 percent of the entire index given that its market
   capitalization and stock option debt exceed $540 billion.

   Microsoft now also has 5.2 billion shares outstanding, not including
   an additional 800 million shares committed and outstanding to
   employees for stock options.  This means that a $1 change in the stock
   price creates a change in their market cap of $6 billion.  Gross
   annual sales are only $20 billion, an amount on which significant
   losses occurred.

   Sadly, the Dow Jones Corporation, parent to Barons and the Wall Street
   Journal, has also unknowingly become a key contributor to this massive
   financial fraud at Microsoft.  In the last 6 months the Dow Jones
   Corporation, which earns licensing fees from these indexes, has
   initiated two new indexes which will allow Microsoft to accelerate its
   plundering of the retirement system.  These are the Global Titan Index
   and secondly the revised Dow Index. Both could result in significant
   new demand for Microsoft stock and leave investors holding inflated
   paper just as Savings and Loan investors were left holding junk bonds.

   Given that Microsoft may be the largest advertiser to the Wall Street
   Journal, perhaps they should make an outright offer to purchase the
   Dow Jones Corporation.  This would provide more clarity regarding
   constituencies and the Wall Street Journal could be added to the MSN
   lineup.  Rather than disclose this situation, the Wall Street Journal
   has instead focused on trivial items regarding Microsoft's financial
   practices, most recently how deferred revenue is recognized.  It is
   astonishing that the Wall Street Journal refuses to report this story.

   A new risk to the market effective November 1, 1999 could be a global
   panic triggered by volatility not typical of the Dow.  Parish &
   Company believes that such a panic is now unavoidable yet is also very
   optimistic that the broad market will recover quickly, even though
   Microsoft should experience a long-term decline of 50-80 percent. If
   such a situation does occur, it will be a true test of the Federal
   Reserve. Will they be able to resist lowering rates which would simply
   reinflate Microsoft's stock?

   It may seem hard to accept, yet the net effect of the Federal
   Reserve's interest rate reductions in 1998 on the stock market today
   was to result in 5 technology companies' stock values accounting for
   77 percent of the entire gain in the S&P 500 year to date, according
   to USA Today.  Microsoft's stock has doubled during the last year.
   Since there is no interest cost on their stock option debt booked to
   the income statement, subsequent interest rate hikes have not affected
   their reported profits.

   Microsoft is a Cash Machine but Where Does the Cash Come From?

   [mspiegraph699.gif]

   <pie chart:

          Put Option Speculation         =  9%
          Product Sales                  = 35%
          Emploayees Prepaying Wages     = 20%
          Tac Loophole/Corporate Welfare = 36%

   Several Impacts from Microsoft's Financial Pyramid Scheme Include the
   Following:

   This scheme led by Microsoft is having many unexpected impacts, a few
   of which are noted here.  This list will be expanded on a weekly basis
   so please visit again.

   1)  Government Will Be Defunded.  Beginning next year education,
   defense and other key programs will have to fight over a sudden and
   sharp drop in tax receipts.  Corporate tax receipts are already down 6
   percent while individual receipts are up 6 percent.  Since these bogus
   deductions are able to be carried over and offset against future
   quarters' earnings, this difference will accelerate in the future and
   leave various government agencies fighting for a smaller pool of
   resources.  This was forecast in the study.  Also to consider are
   massive AMT tax credits that individuals who paid tax upon exercising
   options will be carrying forward into next year and offsetting
   ordinary income tax.  Analyzing this situation should be a top
   priority for both the Federal Reserve and Treasury given the upcoming
   budget negotiations.

   There is a unique irony that Bill Gates recently dedicated $1.5
   billion to minority student scholarships and at the same time is
   leading a massive fraud that will effectively defund public education
   in many states.

   2)  The Retirement System Is Being Plundered.  Most new investment in
   Microsoft is coming from the 401K, 403B and public pension
   participants through large funds such as Fidelity, State Street,
   Barclays and Janus.  These fund families will make their fees whether
   the stock goes up or down and they are clearly not meeting their
   fiduciary responsibility to plan participants.  Their consultants and
   advisors including Buck, Callan and William Mercer might do a risk
   assessment based upon the 404C fiduciary requirements.  The Savings
   and Loan debacle took down not only many banks but also their
   consultants, accountants and law firms.

   3)  Business Owners Are Exposing Their Personal Assets By Not Paying
   Enough Attention To Their 401K.  ERISA 404C has severe sanctions
   against employers who are not adequate stewards of their 401K plans,
   specifically those that do not meet the prudent fiduciary
   expectation.  Such lawsuits are already beginning, the corporate veil
   is no protection and the law also allows for treble damages.  Most
   CFO's put 401K plans on their "to do" list, check them off once set up
   and move on to the next thing.  Many seem not to grasp that these are,
   for the most part, non-company assets.

   4)  The Dollar Is Being Devalued In Relation to the Yen.  The Japanese
   have struggled for 10 years to recover from their own version of
   accounting fraud and they know that now is not the time to accommodate
   our monetary desires without first forcing us to face up to the
   corruption in our own markets.  Simply put, Japan is becoming our own
   personal IMF and will devalue our currency until reforms are
   initiated.

   As noted before, what caused the Japanese banking crisis was not
   plunging real estate values nor bad monetary policy, but rather
   accounting fraud in which companies put phony assets on the books, in
   particular software research and development costs.  These costs
   should have been charged to earnings. Loans were made off these bogus
   assets which helped bank stock values increase, leading to margin
   lending by consumers to buy the stock, often borrowing off real estate
   values to get the shares. When the loans could not be repaid and it
   was realized that there were no real assets backing them, the system
   collapsed.

   It was a startling public display of Alan Greenspan's need to brush up
   on accounting when he actually said in his Jackson Hole speech that
   corporate profits were understated due to not capitalizing software
   costs.  Those of us familiar with this industry know software is
   subject to rapidly becoming obsolete with most products requiring
   constant upgrades to stay competitive.

   Due to this obvious need for the Federal Reserve to better understand
   key issues in determining share values, Parish & Company is
   recommending that the Federal Reserve Board be expanded by one
   non-voting member from the mutual fund industry.  This recommendation
   includes nominating John Bogle, founder of the Vanguard family of
   mutual funds, to be considered for this role.

   5)  False Inflation is Emerging.  This paper wealth, rooted in a bogus
   tax deduction that grossly overstates earnings, is driving Microsoft's
   stock price which in turn greatly expands the purchasing power for
   luxury goods and services. Most inflation is now in services and
   luxury goods and not reflected in the CPI. This is false inflation
   because it is a result of a scheme, not economic fundamentals. Given
   the capacity to increase supply due to more efficient production and
   heightened global competition, it is tough to raise prices. Only
   monopolies are indeed able to even keep prices at current levels. We
   therefore have a reality of low inflation competing with a pyramid
   scheme creating an illusion of inflation.  This is not good for any of
   us, especially the investment industry.

   6)  The Integrity Of The Markets Is Being Destroyed.  This is perhaps
   the greatest risk and again what led to the Great Depression in the
   1930's.  It is a fact that Roosevelt wanted to nationalize the
   accounting profession and make all auditors government employees due
   to a complete loss of confidence in the accounting profession.

   7)  The Fraud Is Accelerating. Microsoft reported earnings of $2.2
   billion for the quarter ending 9/30/99 although they actually incurred
   a significant net loss. Company press releases imply that they took a
   tax deduction for stock option wages of between $2.5-4 billion and
   none of this amount was charged to earnings. Many investors believe
   that option wages are charged to earnings when the options are
   exercised, yet that is false. Employees pay ordinary income tax when
   the options are exercised, even if the stock is not sold, and the
   company does take a tax deduction, yet this amount is not charged to
   earnings.

   As previously discussed, stock option wages are indirectly considered
   in the earnings per share calculation due to more shares being
   outstanding but they are never charged to earnings. These are two
   completely separate things, that is, charges to earnings and the
   number of shares outstanding used to calculate earnings per share.  In
   basic fractions we call this the difference between a numerator and
   denominator.

   8)  Microsoft auditor, Deloitte and Touche, issued a "clean" audit
   opinion.  This appears to be a clear violation of the SAS auditing
   standards given that there was no mention in the opinion of several
   significant items, including the massive contingent liability for
   stock options. Deloitte has sadly identified itself as a key enabler
   of this scheme, which is remarkable given that they also function as
   the auditor for many large pension plans. Fidelity investments is now
   in the process of gaining approval for  Deloitte to audit more plans
   and does also manage Microsoft's 401K plan.

   9)  Parish & Company formally requested that the Federal Reserve
   expand its scope to include more focus on mutual funds and add John
   Bogle, retired founder of the Vanguard family of funds, as a
   non-voting member.  Mutual funds are to the Federal Reserve what the
   Internet has been to communications and it is time the Federal Reserve
   respond. Fidelity Investments alone is now managing more than $600
   billion that is completely outside the traditional banking system.
   This is particularly important given the speed of change in the
   financial markets.  The Federal Reserve needs to be more responsive to
   breakdowns in the overall system as clearly evidenced by this massive
   fraud and corruption occurring at Microsoft.  Bogle was chosen for his
   deep knowledge of the mutual fund system and his integrity.  A close
   review of the backgrounds of the federal reserve economists and staff
   clearly indicate the need for this type of outside influence.  More
   than 75 percent of the Federal Reserve's technical staff appear to
   come from no more than five universities.

   10) Significant one day stock value declines at major corporations
   that pay more in cash wages than stock options are accelerating.
   Examples in October include Hewlett Packard, Xerox and IBM.  Even
   though Hewlett Packard is much more profitable than Microsoft, their
   stock will suffer unless they either join the fraud in an aggressive
   way or expose it.  Let's hope they do the latter.

   Should we really reward such financial fraud at Microsoft by making
   its earnings look much better than others when it will result in
   significant job losses in companies that choose to pay real wages that
   are charged to earnings?  Maintaining a strong stock value is key to
   competitiveness given the need to purchase outside technology with
   stock and forge key partnerships. If unable to keep up, these
   companies will lose market share and be forced to curtail benefits and
   ultimately lay off significant numbers of employees. These types of
   layoffs are now accelerating, further destabilizing the economy. Stock
   options are an excellent benefit yet like all benefits they have a
   real cost that should be charged to earnings to maintain the integrity
   of our free market system.

   11)  Microsoft organized a lobbying effort to defund the Department of
   Justice, using supposedly non-partisan groups like the Citizens for a
   Sound Economy.  Imagine how difficult it would be for someone like
   myself, if a government employee, to discuss this situation.  I would
   probably be transferred to a filing job at the North Pole.  Strange,
   how similar to Jakarta we are becoming.  Again, the issue is not about
   stock market valuation but rather corruption and financial fraud. An
   inside joke among many top Japanese businessman is that the only place
   easier to buy influence than Jakarta is Washington D.C.  Now is the
   time to send a message of integrity and prove them wrong.

   12)  Conversions to cash balance pension plans are increasing. This is
   another pyramid impact. What IBM employees still don't seem to realize
   is that their lost pension benefits are resulting from fraud at
   Microsoft.  Microsoft is pilfering these cash balance plans into its
   pyramid scheme by overstating its earnings, thereby drawing a larger
   percent of the index based investment on the S&P 500 and
   correspondingly making it more difficult for companies like IBM to
   compete.  This forces these companies to cut back on real benefits in
   an effort to keep its earnings and stock price up.  This was also
   clearly identified in the original study.

   The Department of Labor has begun reviewing the activities of
   actuaries with respect to these conversions.  It is not amazing that
   in many cases these same actuaries are advising public pensions whose
   assets are being plundered by this massive fraud at Microsoft.  In the
   late 1980's pension raids were very popular and easy to implement.
   You basically hire an actuary to put forth a new set of assumptions
   indicating fewer assets are needed to meet pension obligations, and
   skim off the top.  Cash balance plans are a sham and nothing more than
   a creative way to do what was outlawed in the 1980's.  The Department
   of Labor to should aggressively investigate this area.

   Frequently Asked Questions Regarding The Analysis

   1)  Who are the key people to focus on addressing this situation?
   Alan Greenspan and Robert Parry of the Federal Reserve, Arthur Levitt
   and Lynn Turner of the SEC, Alexis Herman from the DOL and Larry
   Summers from the Department of Treasury.

   2)  Where is the stock given to employees coming from? More than 90
   percent of it is coming from the equivalent of a photo copy machine in
   the back office. Microsoft has repurchased some shares to cover stock
   option commitments, yet again, our fourth grade math teacher would
   tell us that it doesn't much matter if 90 percent of the shares are
   coming from the photo copy machine in the back office.

   When stock is issued it is a two stage process.  First the board meets
   and "authorizes" the issuance of more shares.  This can be done with a
   simple memo and does not imply that the shares are issued but rather
   that they can be if management so decides.  With this approval,
   Microsoft's CFO then fires up the photo copy machine and passes the
   shares out at which time they are effectively issued.

   3)  Why do you call this a pyramid scheme?  I don't see the various
   levels?
   Microsoft knows that for every dollar they can inflate their stock
   price, they will be able to create 35 cents in the form of lower
   taxes.  This is because they will be able to take a tax deduction for
   the $1 increase as stock options are exercised. They have effectively
   developed a cash machine, common to all such pyramid schemes.

   The top level is Bill Gates and the bottom level are 401K, 403B and
   public pension retirement plan participants.  Microsoft employees and
   various other levels reside in between.  The share price is being
   leveraged higher by an undisclosed debt pyramid which is common to all
   such schemes. As Bill Gates and top management aggressively diversify,
   employees and the retirement system are being left with inflated
   shares.  Imagine the heartache of working 60 hours a week, thinking
   you are part of this great technology company, only to realize that
   you are part of a scheme robbing the retirement system.  For this
   reason alone you would think that the anti-Microsoft movement could
   show a little compassion toward the Microsoft employees.  As you know,
   most aren't happy.  They know something is wrong given the enormous
   demands put upon them.  Financial pyramids are very hard to sustain
   once the base becomes too wide.  In plain terms, there are now more
   than 5 billion shares outstanding.

   4)  Why hasn't the media fully disclosed this situation, especially
   the massive bogus tax deductions?
   Microsoft is the biggest business press advertiser and has a brilliant
   PR team. Just imagine negotiating the printing of this story with your
   editor.  Again, this is no conspiracy but rather simply a situation
   involving a ruthless competitor with a massive amount of cash pilfered
   from the retirement system to spend on advertising and PR.  As Bill
   Moyers has noted, "Free Press for Sale."  It is also important to
   remember that Microsoft has millions of avid supporters due to new
   opportunities they have created in the computer world. Naomi Wibe,
   Nigel Jaquiss and Jeff Rense are a few courageous journalists, along
   with Jaimi Warner of the Independent in the UK, who wrote the lead
   editorial in October 1998 based upon the study conclusions.

   5)  Aren't you afraid of being sued by Microsoft?
   That is a possibility yet courts these days frown very heavily upon
   malicious law suits.  This would also provide an expanded platform and
   an opportunity to counter sue.  The original goal was to work together
   with Microsoft to improve the retirement system in this country.
   Sadly, they just don't seem to get it and perhaps are suffering from a
   "not invented here" syndrome so prevalent in large corporations.  They
   don't necessarily have to be a big long-term loser, yet are certainly
   now positioning themselves to be just that.

   6) What are some of the legal risks to Microsoft and are you contacted
   by many law firms?
   Not a day goes by without being contacted at least a couple of times
   by large law firms, usually based in New York, Philadelpia and other
   large cities.  Their lack of interest in the goal of reforming the
   retirement system is frustrating; they instead focus on where a
   potential fee bonanza might be. Some of basic questions regarding
   legal risks to Microsoft include the following:

         a.  Could Microsoft be sued under the RICO law for racketeering
   with media and investment companies to price fix their stock?  There
   are some interesting cases here and very broad applications of RICO
   such as the anti-abortion group being successfully sued after bombing
   clinics.  It was also successfully used to sue absentee landlords in
   New York City. RICO was originally intended to fight organized crime
   or the Mob. Microsoft should probably be very careful regarding who
   they are selling those put contacts to and also make sure clear lines
   of independence are held in relation to supporting organizations.
   RICO specifically requires collusion between more than one
   organization and so keeping clear lines of separation between Sullivan
   and Cromwell, Deloitte and Touche, Waggener Edstrom, PR Newswire,
   Goldman Sachs, Fidelity and Janus should be a top priority.  Given
   that all of above have been publicly informed on repeated occasions
   regarding the claim of significant financial fraud at Microsoft, that
   should make the importance of this all that more obvious.

       b.  What about this ERISA 404C risk? Can Microsoft be sued here?
   404C is a strict rule resulting from pension abuses in the 1960's that
   requires plan fiduciaries to act in a prudent fiduciary capacity,
   identified as someone familiar with such matters. The real exposure
   here is for whomever signs the annual 5500 report, usually the
   business owner or top management at the company offering the
   retirement plan.  This is particularly disturbing in that many fine
   companies, including privately held family businesses, could be easily
   sued under this provision. Although investment companies talk about
   reducing fiduciary risk, I have never seen a 5500 report signed by an
   investment company.  In the end, the sole trustees for purposes of the
   law are usually business owners and top management.  Most do not have
   a clue regarding the risks they are taking, especially the reality
   that ERISA can easily pierce the corporate veil, going after personal
   assets, and makes a special point of providing for treble damages.  If
   these measures seem severe one need only remember that these are for
   the most part non-company assets.  The plans have really taken on the
   character of mutual savings banks in which are entrusted the average
   person's life savings.

       c.  If you brought a legal action against Microsoft, what would
   you do?  If unable to come to some sort of compromise on retirement
   system reforms I would want to sue them for impairing my ability to
   function as a competent investment advisor.  Of course any competent
   judge would immediately throw out a case like this, perhaps even
   fining me for filing a nuisance suit.  Such an action against
   Microsoft would most likely be too abstract for the courts to
   appreciate.

   7)  What if I am interested in hiring you as my advisor and has this
   helped your business?
   Actually, this has involved a huge sacrifice for my business.  People
   don't want to hear this, especially in Portland, Microsoft's back
   yard.  I have many friends who work there in addition to many friends'
   children who work there.  There is also somewhat of a "crackpot
   factor" that scares some potential clients. My existing clients are
   very happy however and have received excellent returns. If you look
   closely at comments directed toward the study you will see that they
   rarely discuss the study but rather make a simplified conclusion or
   personal opinion on completely unrelated matters.  This story is
   really about basic math and fractions, not accounting and finance
   finance.

   My business is structured as follows.  Clients select a top quality
   discount broker with the broadest access to mutual funds, stocks and
   other investment alternatives and pay a flat fee of .75 percent a year
   to have me as their fee based advisor.  A portfolio is then
   recommended focused on top quality, well diversified low cost
   investments.  This includes mutual funds (usually Vanguard),
   individual stocks, Treasuries or whatever else might seem appropriate
   in building or sustaining your particular financial house.  A key
   focus is on making as few portfolio changes as possible in order to
   minimize tax consequences and maintain a laser focus on quality
   companies with proven track records and excellent management.  This
   also includes analyzing new business opportunities, key business
   related growth decisions, insurance, etc.

   The Internet is a wonderful tool but I am afraid that it will take a
   market scare to wake smart people up to the importance of having a
   good advisor as a partner in building their portfolio.  There seems to
   be a sensation that paying for advice is wrong due to the ready access
   to information via the Internet.  Of course this is a message coming
   from the investment companies, who benefit greatly in terms of higher
   hidden fees by not having an advisor like myself involved.

   In addition, I would like to lead the establishment of common sense
   reforms to the retirement system and then sit on major corporations'
   401K committees as the equivalent of an outside board of director.
   This would give me an opportunity to indirectly help millions of
   Americans better prepare for retirement and also demonstrate that I
   could serve individual management members as their independent fee
   based investment advisor.

   Readers highly critical of my putting this sales message in this
   report might note that I do not sell research and accept no fees from
   investment companies, either directly or indirectly.  You may see a
   few typos yet it should be obvious that this is an exceptionally high
   quality and sophisticated analysis of  enormous benefit to investors
   that are open minded.  You can be confident that many top investment
   firms have read the study at least twice.

   8) Not used

   9)  Are you just a frustrated bean counter, envious because you are
   not a large holder of Microsoft stock? No.  I am a concerned citizen
   hoping these wonderful economic times will not be scarified for the
   sake of a pyramid scheme that benefits far fewer people than most
   realize. Being an investment advisor in the 1930's was probably not
   much fun. I like what I do and it is an excellent extension of my
   background and interests.  A good investment advisor gets to be a
   builder, journalist, psychologist and coach all wrapped in one.  A
   most interesting and productive endeavor.

   10)  What led you to uncover this pyramid scheme? It all seems quite
   remarkable.
   Teaching classes on International Finance in Latin America and
   experiencing severe economic dislocations first-hand coupled with
   helping a few clients determine a strategy for exercising their stock
   options.  I tried to draw a line between a Paraguayan friend Enrique
   who no longer receives his social security checks due to government
   corruption and the highest capitalized investment which happened to be
   Microsoft. In the old days money stolen from the Treasury in
   developing nations went to Swiss bank accounts yet today it seems to
   be coming to the U.S. and primarily to the stock market. A defining
   moment was an Arthur Andersen alumni gathering listening to a workshop
   on the stock option topic. It was the look of concern in the
   presenter's eyes during a break and the comment that "yeah, it's
   really scary" when I showed them a graph of Microsoft based upon the
   analysis. Enough is enough, I thought as they later referred to
   Microsoft's outstanding accounting practices.

   11) Why aren't you advising the Federal Reserve and others involved in
   this situation?
   They have not asked for nor responded to the offer to advise them.
   Bankers generally have a hard time managing conflict which is why they
   opt for the security and stability of banking. Many people go into
   accounting for the same reason. I am often told that in person I seem
   quite different than in print. That probably results from not having
   much support regarding my views and a frustration factor at seeing
   what may occur unless reforms are initiated.

   12)  How do you feel about Bill Gates' foundations?
   Last fall a proposal was made that he give 80 percent of his stock
   back to employees via the stock option plan and let them make their
   own charitable giving decisions, suggesting he start with $4 billion.
   He instead gave an equal amount to a foundation managed by his
   father.  What I would like to see is the foundation fund a project
   aimed at achieving common sense reforms in the retirement system,
   including an expanded safe harbor provision for employers that offer
   plans with 5 specific types of fund choices in addition to whatever
   other selections they provide.

   13) What do you personally think of Microsoft's products?  They seem
   to be either high quality or very poor quality with little in
   between.  Word, Excel and Power point are excellent yet the operating
   system, Windows 98 in particular, is a bloated cost ineffective
   disaster.  Everything seems more time consuming and difficult and has
   even driven me to look at some of the newer Macs.  I will stay with a
   PC for now but like most users am anxious for a cleaner delivery that
   is more open to taking advantage of outstanding programs not part of
   Windows.

   I am very grateful to Microsoft for helping me build knowledge and
   experience I would not otherwise been been able to obtain as a result
   of using their products.  If you view the spreadsheet done in Excel
   summarizing 5 years of information regarding this fraud you can't help
   but say, that is beautiful.  Two excellent charts, the underlying
   numbers and assumptions all on one page. Overall, however, Microsoft's
   products have gone from being liberating to oppressive as evidenced by
   Windows 98 and Front-page.

   14)  What advice would you offer supporters of Linux?  Go easy on
   Microsoft's employees.  They have pride too and are very insulated
   from what is occurring.  Regarding a product strategy, why not focus
   on providing what Windows has never done well, for example file
   compression, backups and directory management.  Rather than use
   software testers, try teachers and nurses and focus on the front-end.
   The big lesson regarding Unix was that too little attention was paid
   to the front-end.  Most users are overwhelmed with managing
   information and want simplified direct access to the Internet, a few
   basic applications and a way to store things.

   You may laugh at my web site and think it unprofessional yet that kid
   with a slow line in Chile can easily access the information as can
   people in South Africa and other countries because it is not bandwidth
   intensive nor burdened by ridiculous Front-page files and extensions.
   Microsoft should be ashamed for how it has convoluted internet access
   through the use of Front Page, on both the front and back end.

   Intel will of course be critical to Linux.  Anything that can be
   imbedded as native Linux code on a processor will do wonders for
   proliferating Linux.  That seems to have been the lesson of NSP which
   Intel was forced to remove due to objections from Microsoft.
   Encryption, compression and storage services based directory
   simplifications, i.e. drive designations, etc. would seem ideal.

   Few people realize that Intel is really the primary catalyst for
   efficiency in the computer industry.  If able to support multiple
   operating systems, this innovation would greatly accelerate.  Intel is
   also the only corporation that will be able to keep Microsoft in line
   and therefore, whether Linux users like Intel or not, it is without
   question the key to their success.

   Since Intel is also focused on the hardware side, software and content
   developers won't have to worry as much about having their markets
   invaded by their partner, Intel.  One disappointment with respect to
   Intel is that they have not moved quickly enough in the networking
   area to stimulate lower prices.  John Chambers of Cisco Systems has
   openly touted his goal of being the Microsoft of networking and indeed
   is certainly emulating some of their financial practices.

   15)  How would you handle a stock option program?  By giving options
   liberally to everyone down to the gardener and keep giving them until
   the company started creating consistent earnings.  At that point it is
   important to target key employees and project groups and reward them
   with options and pay and others with cash wages and the ability to
   purchase stock at discounted prices. As companies exceed $10 billion
   in market capitalization, they should realize the importance of
   shifting more to cash wages in order to protect the integrity of the
   financial structure.

   Choosing a balanced CFO once the company matures is also important.
   Greg Maffei., Microsoft's CFO, made his reputation by going to Pay N
   Pak and skillfully liquidating the company through chapter 11.  Is
   that really the kind of experience you want running the finance side
   of a technology company?  Mr. Maffei has also made a reputation for
   being a bully, shouting at reporters, etc.  We all know why those
   types of responses occur.  It is a tactic to intimidate, confuse and
   deceive rooted in the shame of knowing you are wrong but can't face up
   to it.  I have never spoken with Greg Maffei for obvious reasons. He
   is in hiding and smartly using the tactic of completely ignoring the
   study.

   Many of the vicious people that pretend to support Microsoft have a
   similar communication style.  It is almost as if they receive special
   training.  First they insult someone, let's say me, by calling them a
   kook. This causes you to question the message and injects a level of
   insecurity, especially if you are not able to digest the details on
   your own. Step 2 is to extract one detail from the study and refute it
   with generalizations completely unrelated to the study.  A good
   example would be criticizing governmental accounting standards and the
   federal budget, as if those were valid reasons to pilfer the
   retirement system.  Another favorite term of these people is the word
   "dilution."   It's accounted for, they say, but in reality these folks
   need to revisit their fourth grade fractions class.



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